Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Guess Which Mobile Phone Company Is The Lowest Rated? (Hint: It’s Not Verizon)

The recent Consumer Reports survey gives good news and bad news for this provider.

Little-known wireless company Ting is the highest-rated wireless provider according to Consumer Reports. For the worst provider, read on. Source: Ting

When it comes to wireless providers, at times it is hard to determine who provides the best value. It seems like every day there's a new company boasting the fastest, most reliable network and the cheapest service. It makes sense for carriers to boast of coverage, but they need quality networks to add to their subscriber counts.

So as consumers, it can be difficult to know which companies to trust. That's why the Consumer Reports rating carries so much weight, the company is the gold standard of impartiality over its near 80-year history. By allowing no advertising in the magazine, having no shareholders, and paying for the products they test, the company strives to eliminate even the appearance of impropriety. So for would-be carrier shoppers, it makes sense to utilize Consumer Reports' U.S. cell phone carrier ratings (subscription required) to help them make a decision.

Funny name, serious value When it comes to what Consumer Reports refers to as traditional service -- what others refer to as postpaid service -- the top carrier is ... Ting! If you haven't heard of the company before, there's a reason for that: The service's parent company, Tucows, is a domain name registrar and has made a business decision to not spend a lot on Ting-related advertising, instead choosing to offer lower-priced services. Considering they received the top spot on value, it appears they are performing well here. On Ting's website, they boast of an average monthly bill of $21 per device. Overall, the company rating is 91 out of 100 in the survey.

The only other postpaid company that places above a 90 and has an excellent rating in value is Consumer Cellular. The two have much in common: both are mobile virtual network operators (Ting utilizes Sprint's (NYSE:S) network), Consumer Cellular uses AT&T's (NYSE:T), both use month-to-month billing arrangements instead of long contracts, and both are priced lower than the big four wireless providers. Consumer Cellular appears to be focused on older Americans with its AARP partnership and overall product positioning.

One of the big four is the worst Even more interesting is the relationship between MVNOs and the actual owners of those networks in this study. For those not familiar with the term, MVNOs pay for access on the network and then meter it out to subscribers. So it's odd to see the highest and lowest-ranked carriers utilize the same network. But when it comes to the bottom four wireless providers, the results are: Verizon Wireless, a subsidiary of Verizon Communications(NYSE:VZ), T-Mobile (NASDAQ:TMUS), AT&T, and Ting's network provider Sprint.

Overall, Verizon, T-Mobile, and AT&T are rather closely grouped with ratings of 69, 69, and 66 respectively. Sprint actually underperforms substantively with a rating of 59, the lowest rating according to Consumer Reports. In all 10 ranked categories, Sprint finished below average except for three.

Interestingly enough, Sprint fell below Ting in both the web problems and data categories although they use the same network. Consumer Reports asks subscribers to rank these providers, so it is possible for perceptions to be different among two differing groups of subscribers.

This is more bad news for Sprint, but things could be getting betterIn a way, Sprint probably knew they were going to finish last in this report. This report follows a host of other reports that show subscribers aren't as happy with Sprint with other providers. A recent RootMetric study found Sprint trailed all other carriers in performance, falling behind T-Mobile this year. The company is working hard to upgrade its 3G service to 4G LTE with its Spark service.

While the company is busy rolling out the Spark upgrades, subscribers have complained of service disruptions and outages. The company's churn rate more than doubled AT&T's and Verizon's last fiscal quarter by coming in at over 2%.

Spark is an ultra-fast LTE service that Sprint expects to ultimately deliver data at 1GB per second. Initially, the service boasts of peak speeds in the currently impressive 50GB-60GB range. Right now, the service is available in 46 markets and will cover 100 million people by year end. And while that will help improve Sprint's Consumer Reports rankings, the company should also take notes from its MVNO Ting to further boost its standings.

Author

Inspired by the idea of "making your money work for you" at a young age, mostly because he was a lazy child, Jamal parlayed that inspiration into a love of the psychology of markets, competitive advantages, and thematic investing. He later shrug off that laziness, with a career that included stints as a mortgage trainer, a financial advisor, a Sr. Investments Communications Specialist, and a stockbroker. Jamal graduated from George Mason University with a bachelors of science in finance, American University with a masters in finance, and is a CFA charterholder.